Correlation Between Commonwealth Bank and Origin Agritech
Can any of the company-specific risk be diversified away by investing in both Commonwealth Bank and Origin Agritech at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Commonwealth Bank and Origin Agritech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Commonwealth Bank of and Origin Agritech, you can compare the effects of market volatilities on Commonwealth Bank and Origin Agritech and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Commonwealth Bank with a short position of Origin Agritech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Commonwealth Bank and Origin Agritech.
Diversification Opportunities for Commonwealth Bank and Origin Agritech
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Commonwealth and Origin is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Commonwealth Bank of and Origin Agritech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Origin Agritech and Commonwealth Bank is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Commonwealth Bank of are associated (or correlated) with Origin Agritech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Origin Agritech has no effect on the direction of Commonwealth Bank i.e., Commonwealth Bank and Origin Agritech go up and down completely randomly.
Pair Corralation between Commonwealth Bank and Origin Agritech
Assuming the 90 days horizon Commonwealth Bank of is expected to generate 0.22 times more return on investment than Origin Agritech. However, Commonwealth Bank of is 4.55 times less risky than Origin Agritech. It trades about 0.07 of its potential returns per unit of risk. Origin Agritech is currently generating about -0.02 per unit of risk. If you would invest 6,200 in Commonwealth Bank of on October 16, 2024 and sell it today you would earn a total of 3,168 from holding Commonwealth Bank of or generate 51.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Commonwealth Bank of vs. Origin Agritech
Performance |
| Timeline |
| Commonwealth Bank |
| Origin Agritech |
Commonwealth Bank and Origin Agritech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Commonwealth Bank and Origin Agritech
The main advantage of trading using opposite Commonwealth Bank and Origin Agritech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Commonwealth Bank position performs unexpectedly, Origin Agritech can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Origin Agritech will offset losses from the drop in Origin Agritech's long position.| Commonwealth Bank vs. Fuji Media Holdings | Commonwealth Bank vs. Hisense Home Appliances | Commonwealth Bank vs. KENEDIX OFFICE INV | Commonwealth Bank vs. Live Nation Entertainment |
| Origin Agritech vs. MEDCAW INVESTMENTS LS 01 | Origin Agritech vs. CDN IMPERIAL BANK | Origin Agritech vs. Apollo Investment Corp | Origin Agritech vs. Japan Asia Investment |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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